Navios Maritime Partners L.P. Price & Performance (NMM)

The agenda for today's call is as follows. First, Ms. Franco will offer opening remarks. Next, Mr. Desipis will give an overview of Navios Partners segment data. Next, Mr. Tieroni will give an overview of Navios Partners financial results Then Mr. Petrone will provide an industry overview. Now, I turn the call over to Navios Partners' Chairwoman and CEO, Ms. Angeliki Frango. Angeliki? Good morning, and thank you all for joining us on today's call. I am pleased with the results for the full year and the fourth quarter of twenty twenty four. For the full year, we reported revenue of $1,330,000,000 of which $332,500,000 related to the fourth quarter. We also reported net income of $367,300,000.0 and $94,700,000 for the full year and the fourth quarter respectively. Earnings per common unit were $11.98 twenty twenty four and $3.11 for the fourth quarter. Since the pandemic, our markets were driven primarily by geopolitical events of conflict. In Ukraine and The Middle East. We don't know how this event will be resolved. We also don't know the extent to which nations will be subject to continuing or even expanded sanctions. In our view, the resolution of the conflict in Ukraine and The Middle East may involve significant sanctions on oil producing nations.

Materially impacting world trade, In addition, the Trump administration has been vocal about its new tariff scheme but has not yet provided a complete road map so we cannot fully understand its inevitable impact on global trade. Please turn to Slide six, Navios sixty [indiscernible] These vessels have an average age of 9.8 years and are in three different segments: and 16 asset classes. As you can see, the vessel value is approximately equal in each sector. We ended 2024 with a contracted revenue of $3,600,000,000 And $312,100,000 of cash on our balance sheet. We also entered 2025 well positioned. 63% of our 2025 available base As a result, our breakeven is estimated at about $425 per open index day. Our net LTV as of the end of the fourth quarter was calculated at 34.8%, resulting from a contraction in value primarily in the drive by sector. Please turn to Slide seven. I would like to focus on our return on capital program. Under our dividend program, we paid $0.2 dividend per unit or $6,100,000 in total for 2024. In addition, in 2024, we repurchased four eighty nine thousand nine hundred and fifty five common units for $25,000,000 under the unit repurchase program.

Including dividends we intend a total of $31,100,000 in 2024. Through 02/07/2025, we repurchased a total of five eighty five thousand four hundred and twenty common units for $29,200,000 retiring 1.9% of the original Float As unit repurchases were way below estimated NAV, we effectively returned another $1.8 per unit of value to each unitholder through this NAVIC accretion. As of 02/07/2025, we have $70,800,000 available under our unit repurchase program. The volume and timing of further repurchase will be subject to general market and business conditions working capital requirements and other investment opportunities among other factors.

Please turn to Slide eight where we provide sales and purchase update. For the fourth quarter, and 2025 year to date [indiscernible] we generated $18,800,000 gross sales proceeds from the sale of two drybulk vessels. With an average age of 18.7 years. We acquired one vessel for an effective price of $25,400,000 by exercising an option on a charter investment. [indiscernible] We also received delivery of four previously announced newbuilding vessels. Three container ships and one tanker vessel. You can see the [indiscernible] of the related charters on the slide. Contracted revenue update. We continue to focus on building contracted revenue which is now calculated at at about $3,600,000,000 We added $79,000,000 of contracted revenue as follows: $59,400,000 relating to For 2025, we have an estimated breakeven of $425 per open EBITDA day with 37% of our fleet available days open or indexed. Please turn to Slide nine. Where we focus on we have we are executing on our strategy. We have achieved a 23% decrease in net LTV since year end 2022. In terms of fleet renewal and modernization, we have purchased 46 new buildings since the first quarter of twenty twenty one of which 23 vessels have been delivered.

We have also sold 33 vessels since the third quarter of twenty twenty two. We provide a view of the evolution of our fleet [indiscernible] As you can see, our fleet the same size as it was in the year end 2022. Our fleet age remains about the same. We maximize energy efficiency by maintaining of useful vessels with the latest technology. In addition, as you can see from vessel value, the steel value of our fleet has increased by about 34% seems the end of twenty twenty two. I would also note that these steel values do not give any consideration to a $3,600,000,000 contracted revenue. We present at the bottom of this slide the average analyst estimate of the company's NAV per unit for the period starting By $32.2 to $143.2 an increase of 29% over the two year period. And I'll turn the presentation over to Mr. Stratus Esimpriz. Navios Partners' Chief Operating Officer. Stratos Thank you, Gillian.

Good morning, Please turn to Slide 10, which details our operating free cash flow potential, which 2025. We fixed 63% of our available days at a net average rate [indiscernible] $26,198 per day. On contracted revenue almost covers our total cash expense for the year, leaving an estimated breakeven of $425 per open index day. We have 21,018 remaining open or index linked days, should provide substantial cash flow. So that you can perform your own sensitivity analysis, on the right side of the slide, provide our 56,387 available days by vessel type. [indiscernible] Slide 11. We are constantly reviewing our fleet in order to maintain a strong profile. We reduced our carbon footprint by modernizing our fleet benefiting from new technologies advanced environmentally friendly features. Q4 and so far in Q1, we took delivery of four vessels. Two five thousand three hundred TEU container ships, all charter out for an average period of five point three years at an average net daily rate of $36,818 one LR2Aframax vessel has been charter out for five years at $25,253 net per day, our fifth 7,700 TEU LNG dual fuel containership is shuttered out for twelve years at an average rate $41,753 per day. [indiscernible] these deliveries, we have 23 additional newbuilding vessels delivering to our fleet through 2028 representing €1,600,000,000 of investment.

In container ships, have five vessels to be delivered with the total acquisition price of about 600,000,000.0 have mitigated this risk long term credit worthy charters, expected to generate about $500,000,000 in revenue over a six year average charter duration. In tankers, we have 18 vessels to be delivered. A total price of approximately $1,000,000,000 which up to about 14 of these vessels for an average period of five years expected to generate aggregate contracted revenue of about $700,000,000 We have also been opportunistically replacing older vessels. 2024 and 2025 to date, sold 11 vessels with an average age of 17.8 years about two zero two million. Dollars At the same time, we exercised purchase options on five chartering Japanese built driver vessels with an average age of eight years for a total price of $142,000,000 Moving to Slide 12, we'll continue to secure long term employment. In Q4 and twenty twenty five year to date, about 59,000,000 from tankers. Our total contracted revenue amounted to $3600000000.01400000000.0 dollars relates to our tanker fleet, $200,000,000 relates to our drybulk fleet, $2,000,000,000 relates to our container ships. A diverse group of quality counterparties. I now pass the call to Eric Cironi, our CFO, who will take you through the financial highlights.

Eddie? Thank you, Stratos, and good morning, all. I will briefly review our unaudited financial results for the fourth quarter and year ended 12/31/2024. The financial information is included in the press release and summarized in the slide presentation available on the company's website. Moving to the earnings highlights on Slide 13, Total revenue for the fourth quarter of twenty twenty four increased to $333,000,000 compared to $327,000,000 for the same period in 2023, due to higher fleet time charter equivalent rate and available days. Our fleet DCE rate for the fourth quarter of twenty twenty four increased by 2.6% to $23,205 per day compared to Q4 twenty twenty three and our available days increased by 1.1% to thirteen thousand six hundred and seventy one days. In terms of sector performance, the TCE rate for our drybulk fleet and our container fleet increased by approximately 1% to $17,079 per day and $30,623 per day respectively. In contracts, the time charter rate for our tankers approximately 3% lower at $26,646 per day.

EBITDA was adjusted as explained in the slide [indiscernible] Excluding these amounts, adjusted EBITDA for Q4 twenty twenty four decreased by $45,000,000 to $182,000,000 compared to Q4 'twenty three. Include the prepayment of charter hire received by our charters of which $47,000,000 relates to periods from 2024 onwards. Net income for Q4 twenty twenty four was $95,000,000 Total revenue for the full year 'twenty four in dollars dollars compared to 2023. The increase in revenue was mainly a result [indiscernible] time charter equivalent rates despite slightly lower available days. Our 2024 fleet PC was 22,924 per day. In terms of sector performance, rate for our drybulk fleet increased by 18% to $16,959 per day compared to 2023. In contrast, TCE rates for our containers and tankers were approximately 105% lower respectively. For 2024, TCE rates for our containers stood at $30,370 per day and for our tankers at 27,093 per day. Adjusted EBITDA for the year 2024 decreased by $16,000,000 to $732,000,000 compared to last year. Excluding the $47,000,000 prepayment mentioned earlier, 2024 EBITDA would have exceeded 2023 levels. Net income for 2024 stood at $367,000,000 Earnings per common unit for the fourth quarter and full year 2024 were 3.11 And $11.98 respectively.

Turning to Slide 14, I will briefly discuss some key balance sheet data. As of 12/31/2024, cash and cash equivalents, including restricted cash and time deposits in excess of three months by $312,000,000 During the year, we paid [indiscernible] net of debt. We concluded the sale of 10 vessels for $190,000,000 adding about $128,000,000 cash after debt repayment. Long term borrowings including the Carnivores fees, increased by $267,000,000 to $2,100,000,000 mainly as a result of the delivery of 12 newbuilding vessels for which the respective delivery installments were paid with debt. Net debt to book capitalization slightly increased to 34.7 Slide 15 highlights our debt profile. We continue to diversify our funding resources between bank debt and leasing structures. 28% of our debt has fixed interest rate at an average rate of 5.5%. We also have mitigated part of the increased interest rate cost by reducing the average margin for the floating rate debt for the in the water fleet to 2%. I would like to note that the average margin for the floating rate debt for our newbuilding program is 1.5%. Our maturity profile is target with no significant balloons due in any single year. In Q4 twenty twenty four, Navios Partners two new credit facilities for up to $120,000,000 to refinance the existing indebtedness 11 vessels.

In addition, we completed $16,000,000 sale and leaseback facility or one vessel.

Finally, recently Navios Partners agreed to enter into an export credit agency back facility for a total amount of up to $148,400,000 in order to finance part of the acquisition cost of two new buildings 7,900 TEU containerships. Currently under construction. The facility matures twelve years after the delivery date of its vessel and bears interest at Soffeara plus 125 basis points per annum. The facility remains subject to completion of definitive documentation is expected to close the first quarter of twenty twenty five. I now pass the call to Ted Petrone to take you through the industry section. [indiscernible] Thank you, Erie. Please turn to Slide 17. On February 1, The U. S. Announced additional 10% tariffs on all existing duties for all products imported from China. On February 4, Beijing announced additional tariffs of 10% to 15% on U. S. Goods including coal, LNG, crude oil, agricultural machinery and Los Otos. At this time, the announced tariffs are not expected to have a significant effect on global trade as the combined U. S.-China tariffs equal approximately 90,000,000 metric tons equal to only about 0.7% of global seaborne trade. February 1, U. S. Announced 25% tariffs on Canada and Mexico all products imported from each country except for energy and energy resources coming out of Canada.

The tariffs on Canada and Mexico were postponed one month after discussions between the leaders of each country.

Situation is fluid and bears monitoring as there is a potential for further escalation should the expected negotiations not be successful. Please turn to Slide 18 for a review of current trade disruptions. The Red Sea entrance leading to The U. S. Canal, a strategic maritime transit point continues to operate at restricted transit levels. In fact, the February registered the lowest transits 173 vessels since November of twenty twenty three. Disruptions have caused a rerouting of ships via the Cape Of Good Hope increasing costs and distances. In 2024, total ton or TEU mile increases per segment were estimated to be approximately 18% for containers 1.5% for crew tankers 8% for product tankers and 5% for dry bulk. The situation remain unchanged in 2025, total ton or TEU miles for all sectors are projected to experience only slight variations. [indiscernible] Panama Canal transits are essentially back to normal numerically with slight restrictions on certain vessels drafts. A review of the tanker industry. GDP is expected to grow by 3.3% in 2025 based on the IMF January forecast, The IEA projects a 1,000,000 barrel per ton increase in global oil demand in 2025, Chinese crude imports slowed in 2024 averaging about 11,100,000,000 barrels per day [indiscernible] 2% or about 200,000 barrels per day compared to 2023.

Q4 played out in a similar softer fashion on the back of the above mentioned slowing Chinese crude oil demand, and OPEC plus delaying the unwinding of the 2,200,000 barrels per day voluntary export cuts from December 1 until April one of twenty twenty five. BDTI averaged $9.56 for Q4, basically unchanged from Q3. While the BCTI averaged $571,000,000 from 18% below Q3, changes to U. S. Policies regarding tariffs and sanctions are dealt with in Slide seventeen and twenty one. Overall, these changes along with normal seasonality and low global oil inventories should support crude freight rates going forward. Please turn to Slide 21. [indiscernible] 01/10/2025, the U. S. Office of Foreign Assets Control OFAC issued new sanctions targeting Russian oil revenue with The U. S. Adding 186 ships mostly trading Russian oil to its sanctions list OFAC's action more than doubled the sanctioned vessels As per the chart on Slide 21, the total crude fleet now sanctioned is 9% both China and India have said they will not allow OPEC sanctioned vessels to discharge leading the market to charter vessels from the regular fleet.

VLCC spot rates for Middle East Gulf to China as of February 11, are about 40% higher than January 9, that is the day before OPEC sanctions were announced. [indiscernible] Additionally, on February 4, 2025, The U. S. Reinstated the maximum pressure campaign against instructs U. S. Agencies to rigorously enforce existing economic sanctions and introduce new measures targeting Iran's oil exports. As previously mentioned, both crude and product rates remain at healthy levels due to solid supply and demand fundamentals and shifting trading patterns. [indiscernible] Crude ton miles are expected to grow 1% in 2025. Product ton miles, however, are expected to decline 0.5% in 2025. Turning to Slide 23, VLCC fleet contracted 0.2% in 2024 expected to be similarly negative in 2025. The decline can be partially attributed to Oona's previous due to CO2 restrictions enforced since the beginning of 2024. The current order book is 9.6% of the fleet or 87 vessels, after a record ordering spree in 2024. Vessels over 20 years of age are about 19.8% of the total fleet, 181 vessels, which is over two times the order book. Turning to Slide 24. Product tanker net fleet growth 1.7% for 'twenty four and is expected to be 4.3% in 2025.

Current product tanker order book is 21.3% of the fleet and compares favorably to the 19.1% of the fleet which is 20 years of age. [indiscernible] concluding the tanker sector review, tanker rates across the board continue to healthy levels the combination of moderate growth in global oil demand OFAX sanctions new longer trading routes for both crude and product tankers the IMO twenty twenty two regulation should provide for healthy tanker earnings going forward. Please turn to Slide 26, review of the dry bulk industry. Expectations for a seasonally strong Q4 started well with the BDI standing at 2,084 on October 1. However, slowing Atlantic exports along with unwinding congestion contributed the index ending the quarter at 99752% below its start. All three asset classes reached their lowest levels in December. Capes led the way in Q4 down approximately 68% with 33%. The yearly average BDI ended 2024 at $17.55. Dollars up 27% year on year but approximately 21% below its twenty year average. Drybulk trade is expected to grow at 0.6% in 2025 enhanced by about 0.9% increase in ton miles. Most of this growth is anticipated to come from additional Atlantic exports of iron ore and bauxite the vast majority destined for China and Southeast Asia.

We With net fleet growth projected to outpace trade growth in 2025, supply and demand fundamentals have weakened as compared to overage vessels and tightening GHT emission regulations remain positive factors. Please turn to Slide 27. Current order book stands at 10.5% of the fleet net fleet growth is expected to be 3% in 2025. [indiscernible] that will be uneconomic due to IMO 2023 CO2 rules. [indiscernible] which is slightly higher than the order book. In concluding our dry book sector review, slowing growth in demand from natural resources should be balanced by restrictions in [indiscernible] longer haul trades of bauxite and iron ore, West Africa to Southeast Asia, a low pace of newbuilding deliveries. Should support freight rates going forward as the freight futures market currently indicate turn to Slide 29 for a review of the container industry. The Shanghai container freight index SCFI is currently at eighteen ninety seven which matches the opening index of twenty twenty four. Approximately 49% down from its peak of 3,734 in in 07/05/2024, which was the highest level outside the pandemic era. Contrast to the previously mentioned box rates, container ship rates remained firm on the back of continued rerouting vessels away from the Red Sea and around the Cape Of Good Hope, causing TEU miles to increase by about 18% this year.

Firm time charter rates should remain the duration of the Red Sea disruption. However, continued record new billing ordering and record fleet growth should eventually modify these gains and reverse course when the Middle East conflict finally settles and line of companies are certain of safe passage in the Red Sea, Although trade is expected to grow by 2.8% in 2025, net fleet growth of 10.1% in 2024 followed by 5.9% in 2025 should eventually pressure rate downward. Turning to Slide 30, the current order book stands at 26.8% against 13.9% of the fleet 20 years of age or older. About 80% of the order book is for 10,000 TEU vessels or larger. Concluding the container sector review, should Suez Canal transits return to previously normal levels, supply and demand fundamentals will be challenging, combined with geopolitical uncertainties and continuing elevated order book. However, our world GDP growth of 3.3% for 2025 and ongoing strength in The U. S. Economy provide a positive counterpoint for a challenging '25. Now like to turn the call over to Angeliki for a final comments. Angeliki? Thank you, Ted. This completes our formal presentation and we open the call to questions. Thank you. And we will take our first question from Omar Nachta with Jefferies.

Please go ahead.

Thank you. Hey, guys. Good afternoon. Thanks for the detailed update as usual. Always very much in-depth One of the Angelique, in your opening comments, you mentioned all the uncertainty in the market these days. And obviously, that's always been the case, but it just seems like it's just brewing clearly. With tariffs, sanctions, [indiscernible] The Middle East and Russia. It's all leading to a lot of unknowns How has that sort of affected your business this caused you to change anything in terms of of how you're operating or in terms of capital deployment? Or shareholder rewards? Any color you can give on that front?

I think that's a very good question. Mark, good morning. The big thing is you show solid results for 2024. Looking at 2025, I mean, in as a company, we did a whole strategy and you see that you don't have the economic factors, but you have a lot of geopolitical events [indiscernible] how they will be resolved We have such a very important it can be very important drivers for us business from [indiscernible] Middle East with the Red Sea and Iran, And additionally then you have the tariffs. I can give you Take for example the last days of the pipeline at the station you had sanctions on on the dock fleet. That meant my offer. That meant 9% of the Thank you, Supe. Was basically removed. As much as inefficient it was. And then you can have an event where a Red Sea opens. We haven't seen it yet. These kind of events can really substantially changed the the market on one sector of the other. Sure. The big benefit of Navios is your diversified fleet I mean, a big pillar of stability our $3,600,000,000 of contracted revenue we have time to think and our breakeven per day of $425 with twothree of our days contracted.

And a lot of our open days, which are drybulk, indexed with our ability to really see the forward market and be able to capture the upside. So basically, you need to what? If you can tell me how these events will unfold or how tariffs will be applied It can have a quite significant differences on the [indiscernible] [indiscernible] All containers. I mean, Ted had nine minutes going through the different sectors. I can tell you [indiscernible] infinite possibilities [indiscernible] that's a great point and obviously a benefit of diversification where you're not just stuck bracing for one outcome. I guess maybe just in terms of in container shipping and 2024 was amazing in terms of freight rates and then chartering activity. Obviously, we come into '25, the market is still relatively tight given the diversions from the Red Sea What is the how would you characterize customer base at the moment in terms of chartering habits Is there still an elevated level of interest to secure vessel capacity or has that waned given all this uncertainty.

Now if you take that from the majors, from the liner appetite For Donard, There Is An Appetite For Duration And And We Have Seen It All Over. I Mean, There Was Basically Anything We Have Seen On Red Sea is not it has not changed this view. We have not seen the Shuehiskanar opening because there is still a lot of uncertainty. We are talking about security of the [indiscernible] I mean cargo and vessels, so I don't think that you'll see quickly Unless you see a stable environment, you will not see a change on this.

Okay. Sorry, go ahead. Continue.

I was just saying that it will still continue to go around the cake. So basically you still have that.

Yes. That makes sense. Well, great. Thanks Angelica. Really appreciate the comments. I'll turn it over.

Thank you.

And it appears that we have no further questions at this time. I will now turn the program back to Angeliki for any additional or closing remarks.

Thank you. This completes our quarterly results.

Thank you. This does conclude today's presentation. You for your participation. You may disconnect at any time.